Buying The Cow: The Pros and Cons of Paid Affiliate Sign-ups
"If you can get the milk for free, why buy the cow?" This rather
crass question became popular in the late 1970's, when many
couples chose to live together without the benefit of marriage.
Similarly, today's affiliate marketers tend to favor programs
that offer no sign-up fee, especially when so many include
support, personalized websites, back-office marketing, etc.
And, too, there are programs that offer nothing more than an ID
link and a few banner ads on a login page. In fact, seemingly
sophisticated marketers are often offended by a program that
requires an up-front investment. And for good reason: the
marketer is already investing time, effort and their own
marketing system (i.e., money) to promote a given program-- an
additional investment seems as if the company is taking
advantage of them.
And some do. But not all of them.
In fact, online companies that offer affiliate programs can be
divided into roughly three different categories: Those that
offer free sign up; those that offer a free sign-up but require
some kind of back-end fee; and those that require an up-front
investment from their affiliates, as well as a back-end fee. The
reasoning behind each strategy varies from program to program
and should be considered along with the qualities of each. But,
in general terms, these are the basic strategies behind them:
FREE SIGN-UP PROGRAMS This kind of arrangement is usually
offered by those companies that offer little, if any, hands-on
support for their affiliates. They supply the link and a
login-secure page on their site with several advertising tools,
possibly with an automatic payment system, such as through
ClickBank or Storm Pay.
These companies are generally small -- possibly only one or two
people -- and are hoping to capitalize on the affiliate
marketing system with little or no effort on their part.
Generally, too, they offer only one product or promotion. For
the marketer, unless volume sales are huge, they can expect to
make only a few dollars from these types of programs. But, if
all they have to do is put an affiliate link on their website to
generate sales, this is sufficient for the marketer. Also, a
very small percentage of companies in this category offer an MLM
system.
PRO: These type of programs are a quick and easy way to cash in
on a new product or trend, provided one learns of it early.
CON: Once the market is saturated, sales reduce to the point
where even the small space the link takes up on their webpage
becomes a loss. Also, unless the company is sound -- as well as
responsive to its affiliates -- there is always a chance it
could fold up and disappear before the marketer ever sees any
actual cash for his or her sales.
FREE SIGN UP WITH BACK END PAYMENT PROGRAM This is the most
common type of arrangement and the companies that employ this
seem to be trying to utilize the "best of both worlds" approach.
Either the company will offer initial sign-up for free with
incentives to upgrade, or they will charge for "extras" in lieu
of sales or a downline (in the case of MLMs). Essentially, these
companies are "straddling the fence", that is, trying to find a
way for the affiliates to cover their own expenses without
making an "up-front" investment.
PRO: Programs like this often forego charges once a marketer
creates a certain amount of sales or take the charge out of
commissions, both of which give the marketer an incentive to
make a minimum amount of sales. The companies that use this type
of program usually offer adequate back-office support such as a
support staff to answer questions, payment schedules that are
adaptable to each marketer and regularly updated promotional
materials. They also tend to be better established than the
completely-free-program companies and often have a physical
contact address and telephone number for questions or problems.
CON: Without sales or a downline, marketers are often paying
much more in the long run than many up-front investment programs
charge. Also, in the case of companies that ARE
well-established, a new marketer may be unknowingly entering a
field that is fully saturated with other, well-established and
more experienced marketers. This makes obtaining the sales they
need especially challenging, particularly for the newer
marketer. Getting their foot in the door becomes a challenge of
its own.
THE UP-FRONT INVESTMENT PROGRAM These are less common than in
the past but still exist -- and, in fact, are still being
created -- under certain, specific circumstances. The company
that opts for this arrangement may use up-front investment as a
way to "pre-qualify" its marketers, hoping to capture only the
most professional and serious-minded marketers. They usually
offer higher than average incentives and may also have a
high-demand product in which the company has already invested
heavily themselves. And, too, they may be budgeting for future
advancements and product placements, as well as creating support
teams specifically designed to help the marketing staff alone.
These companies will often include -- to help off-set the
investment -- many back-office features not usually offered to
marketers in other programs. And, without exception, these
companies offer higher-than-average commissions.
PRO: Programs such as this offer more promise to actually obtain
the kind of income that has become infamous (not to mention
synonymous) with internet marketing. Also, bonuses or other
payment arrangements that allow the marketer to make higher than
average commissions. Back-end support is usually top-notch
including, in some circumstance, the marketer is treated as an
actual employee. Some even include benefit packages and other
employee-like perks. The product or product line is something in
high-demand and/or has a high rate of sales.
CON: The up-front investment obviously causes start-up marketers
to turn away. Also, competition from serious marketers who have
well-established sites makes succeeding in this field
challenging. Further requirements after joining the program that
may increase the challenge of succeeding. Due to their inherent
popularity, a short time-frame in which joining this type of
program is viable in terms of ROI.
In choosing individual programs, a marketer must decide which
type is best for them, regarding their resources, their own
marketing strategy, the overall ROI (return on Investment), and
based on their advertising campaign/budget. Many marketers
choose a mixture of these programs in order to minimize their
investment while maximizing their return.
Oh and, by the way? In case you're wondering, many of those
couples in the 1970's that started out living together, ended up
getting married after all. So, what does that say about getting
the milk for free?--mo